Date: 05th Dec, 2022
Those days of waiting in long queues for depositing or withdrawing cash at the banks are becoming a faint memory. Mobile banking is growing steadily in India. This digital channel allows customers to do transactions and avail of new products and services through their handy smartphones. Research shows that 8 out of 10 Indians with a bank account use mobile banking apps regularly. 32% of households use digital payments every day.
Visits to physical branches are declining. And it’s not just the customers who benefit. The banks can also benefit from this transformation. Banks can also gain a competitive edge over others by offering convenience, secure transactions, and 24/7 services. More importantly, they can reduce the operational costs of running a physical branch.
However, while the prospects of digital or mobile banking look bright, Indian banks face challenges in delivering a good customer experience through mobile apps. According to a Forrester report, banks face considerable trouble in improving their customer experience (CX). The overall quality of CX continues to remain stagnant. Other issues like security and scalability have also become an obstacle to the bank’s digital transformation efforts. These are hidden costs that could impact the bank’s performance. Let’s find out more about it.
The Hidden Costs of Poor Application Performance
1. Poor User Experience
Most banking apps in India have improved their user experience since 2020. They have a better interface and provide seamless payment integrations and easy navigation. However, there’s still a long way for these apps to reach the global standard of good user experience for an array of transactions. For example, according to a Forrester report, no bank has scored above 60 in money management capabilities. They also don’t provide personalized insights on the customer’s spending, financial health, budgets, etc.
Although banks display the privacy policy in the app, the language is so verbose that it’s hard for the customer to make sense of it. Sometimes banks add new functionalities on top of existing ones. This makes the entire interface and user experience fragmented and hard to navigate. Simple features like search capabilities also require improvement.
But while banks don’t pay attention to user experience, it can make or break the relationship with the customer.
2. Declining Brand Reputation
Unlike an eCommerce app, customers may not quit the bank due to their deep engagement level with the bank. For example, they might have availed of loans or invested money in the bank. So, the churn may not be as high as in other industries. However, it can severely impact the bank’s reputation, making it hard for them to acquire new customers. Customers do not hesitate to take to social media platforms to express their concerns. The frequent outages and poor digital experience could erode the carefully built reputation of the bank. And that’s not all that can happen.
One of India’s top private banks has always held a good reputation among customers. However, the frequent news of their app’s poor performance and other technical issues had impacted the bank’s reputation as well as drawn the attention of the regulatory authorities. In fact, for 8 months the Reserve Bank of India had prohibited the bank from issuing new credit cards because of persistent complaints of technology problems at the backend.
So, it’s essential to pay attention to the app’s performance. This will enable the new customers to trust the bank and build a long-term relationship with them.
3. Poor Customer Retention
A recent survey by Bain & Company shows that 50% of customers plan to switch to neo banks and fintech players in the next 12 months due to their convenience and flexibility. However, loyal customers buy 2.5 times more banking products from the same providers. Previously, a survey by Scroll showed that 45% of customers were willing to purchase financial products online.
Considering that customers are still willing to trust banks and engage with them, banks must not let go of this opportunity. They must focus on retaining customers by providing them with the convenience and data security that neo banks and fintech players promise to offer them. A good digital experience will go a long way in retaining customers and improving profits.
4. Impact on the Bottom Line
According to a survey conducted in the UK, 40% of financial companies had reported an annual loss of $2 million or 16% of the yearly revenue due to poor app performance. While there’s no concrete data available on the Indian banking app, there’s enough evidence to show that slow loading time or poor security could lead to lost sales and eventually affect the bottom line. Customers will not hesitate to uninstall the app if it takes more than six seconds to load. Another survey shows that 10% of customers would leave a brand forever if the app had security issues. Not just that, banks will have to spend more on IT operations and customer support services to respond to disgruntled customers and fix their issues.
A good-performing app will not require these expenses. It will enable the operations and customer support teams to focus on more critical tasks. It will also prevent customers from uninstalling the app or engaging with the bank if they find the entire journey frustrating or suspect that the app is not secure.
5. Compliance and Regulatory
Banks cannot afford to face bans or pay heavy fines in a fast-paced environment. They need to monitor the app’s performance regularly to prevent such outages or security breaches and avoid facing the RBI’s wrath. The RBI has also created a comprehensive regulatory guideline for banks to maintain the secrecy and confidentiality of customer accounts and establish security.
How Can Performance Testing Help Banks?
Unless banks resolve these problems, they are set to lose customers to competitors and fall on the wrong side of the regulators. So, what can banks do to address these problems? As it stands, application performance testing can help in addressing these issues. With application performance testing, banks can test the complex infrastructure regularly to ensure that it performs optimally. The security teams can perform different tests such as:
•Load testing to assess if the system can perform under real-world user loads when the app is deployed
•Stress testing to determine the app’s breaking point
•Scalability testing to check if the app can support and scale when demand increases
•Security and compliance testing to ensure that the app meets all the standards and regulations
Proactive prevention and remediation are essential to ensure that the app performs well and avoids loss of revenue or brand reputation.
At Avekshaa, we help proactively prevent and solve the issues of performance, availability, scalability, and security in the application with our P-A-S-S™ Assurance platform and solutions.